Independent directors

A great board is like a great band—you need the right mix of talent, skills, experience and personalities. If your board needs boosting in the rhythm section, consider recruiting an independent director.

More and more corporations are inviting independent (non-member) specialist directors onto their boards. This is especially true for larger corporations that manage multiple services and have frequent dealings with funding bodies. If your board has a skill gap, or is missing some specialist knowledge, or just needs some extra support, you might try connecting to candidates via ORIC's LinkedIn group, Independent directors of Aboriginal and Torres Strait Islander corporations. You can also advertise a board vacancy through our Corporation jobs page.

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Benefits

Independent directors and the organisations and communities they work with all stand to gain from the right match of skills and need.

For independent directors, it's a chance to develop skills, knowledge, and gain exposure to new experiences. It can also be a rich development opportunity professionally and personally in that they can:

• contribute to Aboriginal and Torres Strait Islander community wellbeing
• gain corporate and Indigenous governance experience
• build cultural competency
• expand networks
• contribute to the success of a corporation
• strengthen communication and leadership skills

For workplaces supporting staff to fill independent director positions:

• demonstrate commitment to community values and involvement
• strengthen relationships with Aboriginal and Torres Strait Islander people/communities
• staff satisfaction, attraction and retention
• increased leadership and communication skills for participating staff
• expanded networks
• enhanced skills at working with cross-cultural teams and stakeholders

For Aboriginal and Torres Strait Islander corporations, having a skilled professional on their governing body can bolster their governance capacity and provide access to important advice and expertise that might be otherwise difficult to obtain. An independent director can:

• strengthen governance structures and processes
• provide access to skills and expertise
• bring a different perspective
• provide specialist advice

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Meet an independent director

A Potaruwutj man from the south-eastern part of South Australia, Rick Callaghan has worked with traditional and non-traditional people across Australia, mainly to help establish businesses.

‘A strong focus is cultural and heritage matters, particularly obtaining resources,’ says Rick. ‘For the past four years I’ve worked with MIB Aboriginal Corporation in the East Pilbara, helping to develop assets through commercial opportunities resulting from its native title determination.’

In 2010 Rick joined the board of the Regional Anangu Services Aboriginal Corporation (RASAC) as an independent director. This large, diverse and successful corporation primarily supplies municipal services, such as community road maintenance, sporting facilities maintenance and rubbish tip maintenance to 12 communities in the APY lands in north-west South Australia. It has also started to provide community patrols to six communities.

‘My skills are chiefly in governance and investment matters,’ says Rick. ‘My background is in business management and human resources, so I enjoy sharing business ideas with the other directors. I lend support, bearing in mind that English for many is a third or fourth language. Most of our meetings require interpreters.’

Maintaining language and cultural identity is vital to RASAC but equally important is that the directors understand the financial and governance issues. ‘It’s a very good board but that’s not to say it hasn’t experienced some moments of instability in the past,’ says Rick.

For just on six years Rick has attended board meetings.

‘What impresses me most is how well the member directors run these meetings. There’s no humbug, discussions are serious and professional. ’

It’s a team effort. As you would expect, the challenges involved in governing a large corporation are constant, but the load is made lighter because directors work together and share with each other their knowledge and skills.

‘I’m proud that, along with the other directors, I’ve helped to steer the corporation in the right direction, and we’ve stayed on top of financial and governance issues. I’ve found the experience thoroughly rewarding. ’

RASAC has three independent directors that work closely with 10 Anangu member directors. For the year ending 2020 it had revenue of $18.1 million and employed 96 people, mostly Anangu.

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Hear what other corporations say about independent directors

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Thinking about appointing an independent director to your corporation?

Corporations considering appointing an independent board member need to be clear on why, so they know what to look for in the person. Is your corporation:

• trying to fill skill gaps in the current board? particular talents, abilities, qualifications?
• looking for someone to help with short-term projects or long-term strategy?
• looking for a different perspective or a fresh voice?

Expectations for directors

What does your corporation expect from its directors—performance, communication, behaviour, professionalism and rights?

Generally most corporations will have basic expectations like:

• follow the corporation’s rule book, policies and procedures
• be punctual and reliable
• be accountable
• come to meetings prepared by reviewing relevant papers or reports beforehand
• respect confidentiality
• respect culture
• give appropriate notice if your availability or personal circumstances change
• fulfil the duties and responsibilities of an independent director
• support other directors.

What does your corporation’s rule book say about independent directors?

Does your corporation have criteria for performance assessment during and at the end of the appointment term?

Selecting an independent director

What process will your corporation use to review candidates and make a selection? For example, will there be a nomination committee, selection panel or external advisers?

It is important to look for someone with the right knowledge, skills, qualifications and experience to complement your board. It is equally important that both parties are comfortable and confident with each other for the relationship to be effective and productive. It is best to meet in person.

Consider bringing one or two shortlisted candidates into your community to informally meet key people to ensure there is chemistry and a fit between both parties. The trip could include activities such as:

• an in-depth discussion about the organisational culture
• a visit to the corporation’s premises and community.

Below is a set of various other factors you will want to consider.

Independence:

• Are they independent of the current directors, staff, legal advisor, members; corporation’s affairs?
• Are there any conflicts of interest?

Experience:

• Do they have relevant industry experience or life experience?
• Have they sat on other boards? Any with similar vision or services?
• Can they introduce you to new networks or business contacts?

Qualifications or skills:

• What skills do you require? legal, accounting, compliance, investment, IT, marketing, strategic planning…
• Where does their specific expertise lie and how will they add value?

Personality:

• Are they a leader, a strategist or a nurturing person?
• Can they work effectively with a diverse group of people?
• Can they disagree without being disagreeable?

Capacity:

• Can they devote enough time to fulfil their duties?
• How many boards does the director currently sit on?
• Directors oversee the business of the corporation. Each director must be personally aware of the corporation’s business and financial position. Do they have time to do this?
• How far are they willing to travel?

Availability:

• Are they currently employed? If so, will they need to be released from regular work duties to carry out their board duties?
• What happens if they change employment circumstances during the appointment?
• Do they have other personal commitments that may restrict their participation in corporation activities?

Performance:

• If they have been on previous boards how has that corporation performed?

Disqualification/convictions/investigations:

• Have they ever been charged or convicted of an offence?
• Are they banned from managing an Aboriginal and Torres Strait Islander corporation? Check the Register of Disqualified Officers.
• Are they an undischarged bankrupt?

Insurance:

• Does your corporation have directors’ and officers’ liability insurance?

Remuneration:

• Be clear on remuneration and expenses for directors.
• Corporations come in all shapes and sizes, most directors perform their duties on a voluntary or unpaid basis. In some circumstances the members may have approved payment of a fixed annual fee or a fee for each meeting attended.
• Corporations may reimburse out-of-pocket expenses incurred attending meetings or carrying out corporation business.

Cultural competence:

• Do they have any previous experience with Aboriginal and Torres Strait Islander corporations, people or projects?

References:

• After a candidate has been interviewed follow up with references. A referee could be someone they have previously served on a board with, an employer or supervisor, or a client who has used their services.

Induction program

It’s important that you get your new director up to speed quickly so they can understand the corporation’s values and priorities, and contribute meaningfully from the start. Some vital background they need to know is organisational culture, values and working processes.

To be effective in their roles, directors need a good understanding of:

• corporate overview
• community and cultural context.

You may be able to impart some of this information in an overview document or brief but it is likely most of this will be learnt or reinforced in person or on the job.

Ideally you would have already invited your new director to your community and introduced them to key people during the recruitment process. If you haven’t done this or there is additional information to be covered you should organise an induction program. Some ways corporations have helped new independent directors are:

• creating a short video about themselves and their community
• providing access to a cultural mentor to answer any questions or guide a newcomer on cultural protocols and tips
• meetings with the rest of the board, key stakeholders such as traditional owners, corporation members and community
• meetings with key staff such as the CEO or managers, plus sessions with small groups of staff
• informal morning tea or lunch for staff and directors to share information about backgrounds, how the corporation is working, ideas for improvement etc
• an opportunity for the director to work at the front line of the corporation’s business.

Prepare an overview of your corporation

As mentioned above, you can help new directors hit the ground running by helping them understand your corporation’s history, vision and goals well before they start.

Before advertising an independent director vacancy a corporation should prepare a brief. You may decide some of this information will go in the advertisement and some may be better placed in your induction program. Suggestions for the brief include:

Your corporation’s story:

• a brief history of the corporation
• vision and goals
• business activities, key projects or services
• number of corporation members
• enterprise structure—structure of the corporation and any relationships with other entities, trusts or advisory groups etc
• current board and proposed board composition
• organisation/staffing structure and overview of key people
• the corporation’s rule book
• policy documents
• names of key stakeholders, funding bodies or creditors
• financial performance
• funding landscape

Your corporation’s context:

• who owns country
• community overview
• key people
• market overview

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